Can ABC's Bob Iger Avoid the Hook?

July 21, 2002

By Ron Grover Bob Iger was there early this year. Iger, president of Walt Disney, grabbed a first-row seat in the ballroom of the Ritz Carlton Hotel, where TV critics gather each July to be spun by network execs pushing their upcoming schedules.

And no one has more need to spin than the Disney-owned ABC Network, which finished last season a distant third after losing nearly a quarter of its viewers. And, perhaps, no media executive has more at stake right now than Iger.

Disney executives are getting the uncomfortable feeling that ABC needs to show remarkable improvement this season or heads will roll -- again. Seven months back, Disney forced out Stu Bloomberg, its second ABC programming chief to leave in four years. For good measure, Disney also watched Steve Bornstein, who oversaw all of ABC, head for the door as well. Disney's board of directors has called Chairman Michael Eisner on the carpet and told him they expect ABC to shape up -- and soon.

MILLIONAIRE GONE BROKE. Even before the board gave Eisner its directive, he and Iger were hard at work trying to right their listing ship, reading scripts and taking meetings with just about anyone who might have had a promising premise for a show. Indeed, it has been a miserable year for ABC, which saw its numbers plummet along with the once-wildly popular Who Wants to Be a Millionaire, hosted by Regis Philbin.

"A false positive," says Eisner now, admitting that ABC let development for new shows fall by the wayside as it counted on Millionaire airing three nights a week to give the network a much-needed lift. In April, ABC decided the show wouldn't return.

Since last year, ABC's ratings have fallen 22%, the largest one-year decline for a network in anyone's memory. The 9 million folks that ABC lured each night last season, according to Nielsen Media Research, are 3 million fewer than NBC and 2 million fewer than CBS. "No one is looking forward more to a new year than we are," ABC Chairman Lloyd Braun told reporters at his network's session. "Our primary job this year is to show the tangible signs of a turnaround."

DINOS AND UNMARRIEDS. That hardly sounds like a raging case of optimism. Still, as Iger and the assembled reporters watched, ABC rolled out a schedule that has promise. The network's new top programming executive, ABC Entertainment President Susan Lynne, says she's betting on a new show called 8 Simple Rules, a new Tuesday night comedy starring Three's Company alum John Ritter and Katey Segal from Married ... with Children. There are also high hopes for a weekly drama based on ABC's miniseries about talking dinosaurs Dinotopia.

And ABC's one hot new show, Bachelor, will be back with two editions next season, each lasting six weeks. And it will be joined by a female version of the show, Bachelorette, starring Tristin Rehn, the 29 year old Miami physical therapist who was the last contestant bounced from Bachelor.

Just back from the annual Sun Valley conference hosted by investment banker Allen & Co., Iger hardly looked like he was in fear for his job. Sitting in the front row, his neatly pressed suit jacket now draped over a chair, he listened intently as Braun and Lynne answered sometimes pointed questions from the assembled reporters. Iger himself politely refused comment.

ALL HANDS ON DECK. Behind the scenes, though, he has been rolling up his sleeves to fix whatever he can. After all, he's the guy who tried, unsuccessfully, to lure David Letterman from CBS in a bold, and ultimately very embarrassing, attempt to oust Ted Koppel from ABC's late-night schedule.

Looking ahead, the Disney high command is eager to give its shows every chance to turn around the network. Eisner and Iger, say Braun, have ordered the rest of the Disney Empire -- its theme parks, ESPN, and Disney Stores -- to pitch in. Each will help promote ABC's prime-time line up this year, he says.

Little wonder Iger and Eisner are calling in the heavy artillery. ABC last year represented 23% of Disney's $25.3 in revenues. And with advertisers fleeing, the network lost $87 million in the last six months, down from operating earnings of $454 million for a comparable period last year. That made ABC one of the biggest drags on Disney's earnings for the six months ended Mar. 31, when overall earnings fell by 29%, to $692 million, on revenues of nearly $13 billion.

END RUN. And it's not clear yet those advertisers are betting along with Iger and Eisner. In May, after watching pilots for the new shows, advertisers bellied up with $1.5 billion in ad sales for the so-called up-front market for shows that will air in September. That's an 8.3% decline from last year's emaciated ad sales, according to Advertising Age. And ABC was the only one of the six networks to see a decline from last year's already abysmal sales in the upfront season.

That's alarming if you're Eisner and Iger. In an effort to revive ABC's 33-year old Monday Night Football franchise, which has seen ratings fall for the last seven years, Eisner and Iger gave the network approval to hire away arguably pro football's best announcer, John Madden, from Fox. Lynne also says the network has convinced producer David Kelley to spend more time on writing scripts for his show The Practice. And there are assorted other new wrinkles for The Drew Carey Show, NYPD Blue, and Alias, she says.

You have to figure, though, that time is running out for ABC to turn things around. And that means that sometime not too far down the road -- say maybe in December -- the network's ratings will have to be better, or someone will have to take the fall.

GETTING PITTMAN'D? The problem is that not many folks are left to fire, says one Disney insider. And with the board demanding changes, that might point the finger at someone like Iger, a former ABC president before the 1996 merger.

That would be a shame. He's known at Disney headquarters as -- with apologies to soul singer James Brown -- "the hardest-working man in show business." He routinely arrives at Disney at 6 a.m. and works past dinner, e-mailing from home after that. But Iger, much like Bob Pittman at AOL Time Warner, may end up taking the rap for the parent company's inability to make an acquisition work.

I met with Iger last December, when he had just finished reading the script for a comedy, The Funkhausers, from Danny DeVito's New Jersey TV production company. Eisner, too, had liked the script about a family that refused to change with the times. But The Funkhausers didn't make it on the schedule that ABC showed off at the Ritz Carlton. The program is being reworked, say ABC executives, not unlike the network itself. You just wonder who may get canceled before the show hits the air. Grover is Los Angeles bureau chief for BusinessWeek. Follow his weekly Power Lunch column, only on BusinessWeek Online